ple ChoIce (writing the calculation may earn you partial credit) 1, T F NYSE is a primary market. 2. T F Other variables he ld constant, there is an inverse relation between bond prices and interest rates. ther variables held constant, there is an inverse relation between stock prices and interest rates. F In capital budgeting, there could be multiple solutions of IRR for one project. F When paying cash dividend, the firm's stock price, will as a result drop by the cash amount. FSuch companies as Google, Amazon that pay zero dividend but have value. DDM cannot explain the puzzle T F Company announcing future dividend cut is bad news to the current stock price. TFThe fact that equity holders are last in line curbs the incentives for business innovation. T F The stock price computed by DDM is ex-dividend price, meaning the price prior to dividend payout. 4. T T 5. T 6. 7. 8. 9